California fires threaten oil and gas supplies
Published On Jan 10, 2025, 8:10 PM
California is currently facing severe wildfires, which pose risks to the oil and gas supply in the region. Fires have already led to pipeline shutdowns, and there are fears of disruptions to crude oil and natural gas supplies due to fire hazards and potential power outages. The five refineries in the Los Angeles area are crucial for the state and the West Coast's energy supply, handling 60% of California's refining capacity. Should these fires worsen, the affected pipelines and operational reductions at refineries may lead to increased energy prices and supply instability.
Stock Forecasts
XOM
Positive
The ongoing wildfires and their impact on oil and gas supply chains could create upward pressure on energy prices across the market. Investors may find opportunities in energy stocks, particularly companies with exposure to oil and natural gas production that could benefit from higher prices due to supply constraints.
KMI
Negative
Given the potential for reduced operational capacity at refineries and the increased risk from fires, companies reliant on stable oil supplies may see negative impacts. This could include midstream companies or those with infrastructure close to affected areas.
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